Authorized Users

[CreditBob]

Ok everyone here is a copy of a private message that I just sent to one of the other members on authorized users. Please do not use this practice because it does you no good. And to some creditors it is being dishonest. If you want a good or great fico score then you have to earn it. I am not just talking about a year or so but a few years or several depending on your responsibility. For those that are about to turn or are 18 years old your parents are doing you no good by adding you as an authorized user.

Authorized users are no longer part of the fico score. Creditors are disregarding them just as if the account was never there. Authorized users do not demonstarte financial ability or responsibility to make payments on an account. The new practice had started a few months ago. However there are two things that you can do. One is to have the account deleted from the credit bureaus because it does you no good. Or you father can make you the co-applicant on the card so that you are equally as responsible. One last thing, if the original creditor, being your dad, is ever late on any payments this would also reflect on your credit with a negative impact on the score.

Edit by cheddar:  Insignificant.  I did not edit the content of this post.

Message Edited by cheddar on 07-01-2008 08:33 PM

[Anonymous]

Bob,

That is only if a manual review is done on the account (which is more common these days), or if the lender is using the new FICO scoring algorithms. Old formulas, which are still the prevalent scores bought by creditors, do not discount AU's. I think you are definitely correct when a risk analyst looks at a credit report though.

[CreditBob]

Thanks for your feedback. Things are quite different in the industry and the lender is going over everything with a fine comb.

[marty56]

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CreditBob wrote:

 If you want a good or great fico score then you have to earn it. I am not just talking about a year or so but a few years or several depending on your responsibility. For those that are about to turn or are 18 years old your parents are doing you no good by adding you as an authorized user.

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I agree 100%.  I do think it is okay for parents to cosign on your first auto loan if that is the only way you can get it.

[haulingthescoreup]

I have to stand up for those who have been AU's for a long time on their spouse's/ significant other's CC's. This is usually (certainly not always) a wife.

A lot of us don't remember or realize that for many couples with one partner working and the other running the home, this was a very common way of handling the family credit. And there's a whole lot more to managing credit than being the cubicle rat with the paycheck. My mother ran the family finances for her entire married life, 1945 (age 18) onward until my father died in 1980, and she was a homemaker. To manage credit well, you not only have to have money coming in (the wage-earner); you also have to make sure that the money is available to pay the bill (the financial manager.) I see absolutely nothing wrong or deceitful about these people having the right to be AU's. In reality, they functioned as joint owners in many cases. But they don't get any "credit", no pun intended, for the role they have played.

We still have posts here from stay-at-home moms --yes, they do still exist --wanting to get a credit card, but thinking that they can't, because they have no earned income of their own.

Too bad for these mostly older people who didn't read the future and realize that they should have gotten credit in their own names, huh? And if they can't convert that card to joint, and their spouse/partner dies or runs off, I guess they're in most cases up the creek, and tough for them, right? *Shrug* --they should have known better.

And shame, shame on those who exploited the AU category by buying and selling credit between complete strangers. They're the ones who did this.

[marty56]

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haulingthescoreup wrote:
And shame, shame on those who exploited the AU category by buying and selling credit between complete strangers. They're the ones who did this.

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In a weird way I would think CCCs would like AU's since there is another person to go after if the bill isnt paid.

[MidnightVoice]

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marty56 wrote:

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haulingthescoreup wrote:
And shame, shame on those who exploited the AU category by buying and selling credit between complete strangers. They're the ones who did this.

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In a weird way I would think CCCs would like AU's since there is another person to go after if the bill isnt paid.

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It is the mortgage and loan people who got messed up more!

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CreditBob wrote:

Please do not use this practice because it does you no good. And to some creditors it is being dishonest. If you want a good or great fico score then you have to earn it. I am not just talking about a year or so but a few years or several depending on your responsibility. For those that are about to turn or are 18 years old your parents are doing you no good by adding you as an authorized user.

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You seem to be assuming that all Americans are dishonest thieves!  There are genuine reasons for people to be authorized user that are legal and moral that you have ignored.  So please do not paint us all with the same brush!

[marty56]

To change the direction here slightly I dont understand why FICO scored them in the first place.  Common sense should have taken over and realized that the accountability of having an AU was overshadowed by the score benefit to the person becoming the AU and undermining what they were trying to do with FICO scoring in the first place. 

[haulingthescoreup]

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@marty56 wrote:

To change the direction here slightly I dont understand why FICO scored them in the first place. Common sense should have taken over and realized that the accountability of having an AU was overshadowed by the score benefit to the person becoming the AU and undermining what they were trying to do with FICO scoring in the first place.

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Because originally, AU's were what I described. It wasn't anyone trying to manipulate their credit scores; just family members on a card. The issue of manipulation didn't arise. It wasn't all that long ago that people couldn't even find out what their scores were. So the concept of artificially inflating available credit wasn't on people's radar.

[Anonymous]

Hauling - any idea on why so many ccc's won't add joint cardholders?  I know we have talked about those that do (Discover comes to mind right away), but all the promo offers I get in the mail only offer credit to me and me alone.  

I agree with the previous post that suggests that the ccc's would want to have joint cardholders so they can go after either party.  But I suppose the flip side to that is that they want to issue 2 separate cards (i.e. hers and his) so they can collect their interest fees, over the limit fees, late fees, etc. from both.